MSME Alliance Wants BOJ Help in Rate Row With Banks

The Medium Small and Micro Enterprises Alliance is calling on the Bank of Jamaica, BOJ, to ramp up its efforts to encourage commercial banks to lower lending interest rates in line with the central bank’s recent reductions.

The Alliance contends that delays in adjusting lending rates are placing unnecessary financial strain on its members.

This it says is stifling their growth and slowing economic development.

This appeal follows a meeting with the president of the Jamaica Bankers Association, JBA.

The MSME Alliance says the JBA stated that it cannot dictate pricing for individual banks and recommended that borrowers negotiate directly with their lenders.

However, the Alliance expressed dissatisfaction with this stance.

It argues that it contradicts previous actions.

It highlighted that in 2022, when the BOJ raised its policy rate to combat inflation, commercial banks promptly increased borrowing rates within six months.

These notifications came with limited room for negotiation.

While commending BOJ Governor, Richard Byles, for addressing the issue of slow rate adjustments, the Alliance is urging the central bank to take stronger regulatory action to ensure commercial banks act promptly.

The Alliance is also encouraging MSMEs to explore alternative financing options, such as seeking private equity or listing on the Jamaica Stock Exchange.